Labor’s proposal for a “sustainable" Australia can be achieved without cutting immigration or economic growth, Treasurer
Wayne Swan
says.

The Treasurer came out in defence of Prime Minister Julia Gillard and apparent contradictions in statements she made this week which implied Labor would seek slower population growth but claimed this could be done without cutting immigration.

In an interview with The Australian Financial Review, the Treasurer expressed optimism about the global outlook, built on continuing strength in the Asia-Pacific region.

He said if the global economy did go into a double-dip recession, Australia was “very well placed to respond to any adverse international economic developments".

“The government showed that it had both the courage and the competence to handle those situations over the past 18 months and have the same courage and competence to handle them should they arrive in the future".

The Treasurer said the population policy proposals put forward by Ms Gillard went back to the debate started by the intergenerational report, and were simply another facet of the need to boost productivity through better infrastructure and skills around the country.

But Shadow Treasurer
Joe Hockey
claimed Ms Gillard should heed former Labor leader Mark Latham’s comments on Tuesday that population debate and policy must address immigration.

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“I haven’t always agreed with Mark Latham but sometimes he says the bleeding obvious," Mr Hockey said. “It is quite clear that you cannot have a debate about sustainable population without addressing immigration."

Julia Gillard’s comments on the undesirability of a big Australia were “all about sending a spin message to western Sydney and beyond", he added.

Mr Swan said the whole thrust of the intergenerational report “was the need to make the necessary investments in productivity enhancing infrastructure and reforms for the future so that it was sustainable" .

“So the core of the IGR, where some of this debate began, was our desire for sustainability enhancing the quality of life and it went right back to the very point that Julia has been making: that there are parts of the country that are experiencing difficulties where the necessary investments haven’t been made.

“There are other parts of the country which are the opposite of that and we’ve got to have a good hard look at all of those arrangements."

Asked about Ms Gillard’s comments suggesting Australia needed to “slow down" and take a breath and assess what was happening in overcrowded cities, Mr Swan said the Prime Minister was talking about distribution of population around the country.

He denied “sustainable" population growth might involve slower economic growth, but said what the government was “absolutely focused on was increasing productivity".

“We don’t have an official target for population growth but what we do have is a target to lift our productivity through all of those factors."

He also denied Ms Gillard’s comments implied lower immigration levels in the future.

“What we are pursuing is a judicious mix of [population] growth which can either be from natural increase or migration, which can be a combination of family reunion and skills, and mixing into that the essential quality of life and economic investments that are required to make that sustainable".

Asked if he saw tax policy playing a potential role in helping to direct people to a particular part of the country, Mr Swan said, “I am not talking about changing zonal arrangements".

“What I do see is the economy- wide measures that we need to take through investment in skills, through lowering the corporate tax rate, through providing small business incentives through many of our programs and skills as all working together to make the overall economy more competitive in an environment where they face challenges which flow from a tight labour market and a higher dollar."

On the world economy, Mr Swan said the outlook for the Asia-Pacific and for South America is “very good". “There is no doubt that growth in ­Europe will be sluggish for some time to come. I am a bit more of an optimist about the US."